Strategic Project Leadership™ Focusing Your Projects on Business Success
Project management in the 21st century will be completely different than it has been in the last 50 years. In the traditional project management world, projects were typically focused on efficiency, operational performance, and meeting time and budget goals. However, today's dynamic business environment and global competition require finding new ways to make projects into powerful, competitive weapons. In this paper, which is based on a decade of research, we describe the transition from traditional project management to the new era of project management. It provides a practical, step-by-step approach and guidelines to organizations and managers on how to turn their projects into successful competitive weapons. At the center of this approach we use a new framework called Strategic Project Leadership™, or SPL. Rather than focusing on “getting the job done,” SPL is focusing projects on creating competitive advantage and winning in the market place. The framework includes six principles, which can be applied by organizations and managers during project planning and execution. The principles deal with: leadership, strategy, spirit, adaptation, integration, and learning. After describing the principles we discuss the transition, and the process that organizations have to implement in order to adapt to the new era of SPL.
From Project Management to Strategic Project Leadership™
Ask any project manager what is his or her job? The typical answer will be, “I need to get the job done!” or, “I need to finish the project on time, within budget, and to specifications!” In some cases, project managers would add, “… and we need to satisfy the customer.” But projects, in most cases, are initiated with a business perspective in mind, and with a goal, that is typically focused on better business results. Hence, it is time to expand the traditional role of the project manager from an operational, to a more strategic perspective. As we found in our research, in the modern evolving organization, project managers will be focused on business aspects, and their role will expand from getting the job done, to achieving the business results and winning in the market place. There is no more time to deal with strategy just at the executive level, and leave the operations to project managers. Project managers will have to grow and become real leaders, and they will be required to handle all aspects of project leadership—strategic, operational, and human. To illustrate this change consider the following case:
The first generation of Ford Taurus turned out to be the best selling car in America in the late 1980s. Conceived in the 1980s and introduced in 1986, it set the standard for new practices in project management and product development, using cross-functional teams and concurrent engineering practices. It established close ties with vendors and subcontractors, and was characterized by a spirit of cooperation and strong synergy among teams. The result was a remarkable business success, and customers simply loved the car. Yet, when the project was completed, the project manager was fired. The reason was that project completion was late by three months.
In contrast, the second generation of Ford Taurus was developed in the early 1990s and completed in 1995. With increased competition and the remarkable success of Japanese imports, Ford had hoped to reestablish Taurus, once again, as the best selling car in America. But the new project manager learned the lesson of his predecessor: He considered project schedule as the most important criteria, and made sticking to schedule the ultimate goal, while sacrificing other issues. Vendor relationships, team spirit, and product integration were just few of the things that had suffered. The second generation of Taurus turned out to be a disappointing business experience. It did not recapture the position of the best selling car in America and Ford was not able to repeat its outstanding success of the first Taurus.
This is what we call the difference between an operationally managed project and a strategically managed project. Strategically managed projects are focused on achieving business results, while operationally managed projects are focused on getting the job done. Management teams in strategically managed projects spend a great deal of their time and attention on activities and decisions that will improve business results. They are concerned with customer needs, competitive advantage, and future market success, and rather than sticking to the initial product definition and project plan, they keep making adjustments that will create better business outcomes and higher competitive advantage. Such projects, however, are quite rare today, and most projects are still managed with an operational mindset, focusing on short-term results and delivery, namely, meeting time and budget goals. While time to market is often critical to business success, in most cases a more long-term, strategic perspective must be used.
Exhibit 1. From Project Management to Strategic Project Leadership™
Exhibit 2. The Six Principles of Strategic Project Leadership
The first step is creating the right mindset and attitude. Exhibit 1 presents the traditional project management approach, as compared to the new, Strategic Project Leadership™ approach. To become strategic project leaders, managers' focus must shift from efficiency only, to effectiveness and efficiency; from operational issues to strategic, operational, and human; and from getting the job done, to getting the business results and winning in the market place. Project definition will involve not just project scope and definition of the work to be done, but also defining the end product and clearly articulating its competitive advantage; and planning and reviews will deal not only with activities, resources and status, but also with end results, success dimensions, customer needs, and strategy. Finally, on the human, “softer” side, the Strategic Project Leadership™ approach will evolve from the common activities of teambuilding and conflict resolution, to extended leadership roles, establishing vision and spirit, and creating meaning and motivation.
The Six Principles of Strategic Project Leadership
As our research has shown, Strategic Project Leadership can be summarized in six principles, that when followed, will help organizations implement the strategic approach and lead the project in a strategic way. While these principles are simple, intuitive, and straightforward, it is surprising to note that few of them are part of the traditional project management practice, and only a few organizations are currently following these principles. We contend that in the future more organizations will realize the importance of the strategic approach to projects and will adapt such principles as the common way in which they manage their projects. The six principles are summarized in Exhibit 2 and described next.
Principle # 1—Leadership: Turn project managers into leaders. Make them responsible for business results.
Traditionally, some have distinguished between the roles of management and leadership in organizations. According to these views, a manager is a problem solver, who looks for best ways to achieve a determined goal, and makes sure that people operate efficiently at their levels of responsibility. Leaders, in contrast, create vision and meaning, and develop fresh approaches to long-standing problems. Managers' attention should be on how things get done, while leaders' attention should be on what needs to be done, namely, “leaders do the right things, managers do things right.” In summary, managers are bringing a degree of order and consistency, by planning and budgeting, organizing and staffing, while leaders are coping with change, setting a direction, creating a vision, and building motivation and inspiration (Kotter, 1990).
One of the major changes in organizational life at the turn of the 21st century is the “leadership transformation,” or the changing role of managers into leaders. Organizations are moving from an autocratic world, in which managers, control, plan, and reward employees, into an environment in which leaders create vision, motivation, and excitement, and inspire people to extraordinary performance. While leadership and management were believed to be two distinct systems of action, it is clear now that both are necessary for success in today's dynamic environment, and the real challenge is to combine good leadership with strong management. Indeed, recent studies have shown that successful organizations must learn to function on the edge; they must constantly focus on the interplay between two extremes—the stability and the change, the control and the renewal (Brown & Eisenhardt, 1998).
Under the traditional project management paradigm, project managers had to execute a plan of action, which was conceived at the business or corporate level. They should start their project by defining the project scope—or the work to be done, and then create a plan, which includes a schedule, a budget, allocation of responsibilities and resources, and a control system to monitor project progress. And their success depends on whether their project met the planned time, budget, and performance.
Perhaps there is no better place to exercise leadership than in projects. Projects are the sites where new ideas are transformed into tangible results, and where vision becomes reality. Project managers must therefore learn to wear “bigger hats” and deal with both sides: They must be responsible for the direction and the plan, for the vision and the execution, and for doing the right thing, while doing it right. As we found out, in exceptionally successful projects, managers and leaders are not complements of each other. Rather, they are all one. The best projects managers are also leaders, who inspire their teams with meaning and vision, and then make sure it is all done well.
The first principle of Strategic Project Leadership suggests, therefore, that project managers of yesterday must learn how to develop the power of leadership—to inspire, motivate, and create meaning. While not every one can be equally good at both leading and managing, this principle means that good managers (or leaders) must be responsible for the two systems—the vision and the execution, the direction and the planning. But above all, it means that project managers' responsibility will be expanded to achieving the business results for their projects. Planning and execution are just means to an end. Among some of their new responsibilities, they will have to revisit and deal with the business assumptions conceived at higher levels, define the product and its business expectations, and most important, identify and articulate a clear project strategy as described in the next principle.
Principle # 2—Strategy: Define the competitive advantage of your product, and articulate a detailed project strategy to win in the market place.
In the traditional project management world, projects typically start with a project plan. The plan includes the project objective and goal, project scope, deliveries, milestones, resources, and activities for execution. Also typically, projects are initiated as part of a grand business plan, which is consistent with business strategy and conceived at the corporate or business unit level. But how exactly is this business strategy translated into project plans? The second principle of Strategic Project Leadership suggests adding a new formal concept, which is currently missing in the common practice (and the literature) of project management. This missing concept is called project strategy, and it is the first item project leaders must deal with when starting a project. What exactly is project strategy?
Most projects today are executed in a competitive business environment. While the term strategy has its origins in the military, in an organizational context the competitive environment comprises the war, and the specific projects are the battles (Mintzberg et al., 1998; Porter, 1985). Obviously, winning in the market place can only happen if you have created competitive advantage, and this is what project strategy is all about. It is the specific project's way of creating competitive advantage. Project strategy, therefore, is not the same as project plan. Strategy is at a higher level than the plan. While plans include decisions about activities, resources, timelines, and deliverables, strategy is what drives the plan. It is that specific way that will create advantage and what makes a difference beyond the routine plan.
What are the components of project strategy? As our research shows, creating a project strategy begins by defining the product and its expected competitive advantage. Specifically, project strategy involves four elements: Product Definition and Competitive Advantage, Business Perspective, Project Scope, and Strategic Focus.
Product Definition and Competitive Advantage. This is the base on which project strategy is built. To define the product you must identify the market, the customer, the need, and the business opportunity. You must then articulate the specific product competitive advantage, namely answering the question, “Why will customers prefer this product and why will they pay for it”?
Business Perspective. This part outlines the expectations when the project is completed. It may involve the business plan or the sales projections and expected market performance, but it also includes the success dimensions with which project success will eventually be assessed (Shenhar et al., 2002).
Project Definition. This part defines the project boundaries—the scope of work that needs to be done, and what will not be done, and thus the basis for the project's work breakdown structure (WBS). Second, since one size does not fit all, this part will also identify the specific project type, which will be described in the fourth principle.
Strategic Focus. This final part of project strategy creates the mindset and guidelines for behavior to achieve the product's competitive advantage and value. These guidelines will help focus activities and foster behavior that will make competitive advantage a reality. Strategic focus describes the policy, the behavior, and the desired processes which, when followed, will create the best competitive advantage.
Principle # 3—Spirit: Articulate an inspiring project vision, and develop an appropriate project spirit, which will support the strategy and create energy, excitement, and commitment.
Effective leaders are capable of creating the spirit or the spark, which ignites energy in people. It is not the energy itself, but the driver, which unleashes untapped power imbedded in almost everyone. They know how to articulate an inspiring vision, and work hard to create the culture, which mobilizes people's motivation.
Exhibit 3. How to Classify Your Project and Adapt to Project Type
Project Vision. The first step in creating project spirit is articulating an appropriate and exciting vision. An effective project vision describes the feelings, which will be present when the project is completed, and its future impact and value. When creating the product vision, you don't need to worry about specifications or technical terms; just focus on excitement and emotions. The vision must “feel right;” and if it does, designers and engineers, will know how to translate it into the right technical terms. The project manager of BMW new three series cars expressed this as follows: “our engineers design our product not just with their brain, but with their heart; our competitive advantage is the joy of driving (the driving experience); and our vision is, “A muscular car that wants to be driven.” Similarly, the vision of Apple Computer's new iBook was “something you throw in your backpack” (Reinhardt & Hamm, 1999).
Project Individual Culture. While every company has its culture, great projects create their own unique micro-culture (sometimes referred as climate), and it is nurtured by a set of values that are demonstrated and practiced by the project manager. The right values and norms will direct behavior and make people aware of what is right and what is wrong, and how to create behavior, which will contribute to the competitive advantage and fulfill the vision. Culture is created through demonstrative behavior (“walk the talk”), setting the right guidelines, conducting rituals, ceremonies, icons, and even appropriate and inspiring project names.
Principle # 4—Adaptation: Assess the environment and your task. Classify your project, and select the right project management style to fit the project type.
As our research indicates, only few organizations use explicit, well-defined ways to distinguish among their project efforts. Yet, in reality, different projects are managed in different ways, and “one size does not fit all.” There is a need for a comprehensive, multidimensional, framework, that will help organizations distinguish among their project efforts and learn to apply different policies and structures to different project types. Our studies in recent years have identified several dimensions to distinguish among projects (Shen-har, 2001; Shenhar et al., 2002). These dimensions are strategic goal, market uncertainty, technological uncertainty, complexity, and pace. It starts by assessing the market, the product, the task, and the environment, and then identifying the specific project type on each dimension. Once you identify the right type on each dimension, you need to select the right manager, the right team, and the right management style, which includes strategy, spirit, organization, processes, and tools (see the discussion on SPL style in the next principle). Exhibit 3 summarizes the various dimensions and project types on each dimension.
Principle # 5—Integration: Create an integrated hierarchical plan. Start with Strategy, and include Spirit, Organization, Processes, and Tools.
In the strategic project leadership context, project planning does not start with scope or schedule. Rather, it starts with high-level elements, and first among them is strategy. Overall, the project integrated plan would include five hierarchical components—strategy, spirit, organization, processes, and tools. Together we call them the SPL style. Each component will be addressed at the overall project level, and then be assessed for various functional and project areas, including the PMBOK® knowledge areas (see Exhibit 4).
Principle # 6—Learning: Create a project learning organization. Every monitoring and controlling activity will include lessons learned. Summarize your project in a lessons learned event and report.
Exhibit 4. The Integrated Project Plan
The last principle of strategic project leadership is about learning and the creation of a learning organization (Senge, 1990). Each project is unique and involves non-repetitive activities. What can be more natural than making projects into learning organizations, where learning occurs during project execution and across projects in the organization? Each project should establish procedures for internal learning. Every event of review and monitoring should include an item of lessons learned, and events, decisions, and in-between lessons must be documented and shared. And when the project concludes it should conduct a lessons learned event, where team members reflect on their experience and a summary learning report should be written and shared with the rest of the organization. Sharing information across projects and summarizing project lessons (particularly from failures) should become a common norm, and no new project should start before the project manager has learned the relevant lessons from previous projects.
Implementing the Strategic Project Leadership™ Framework
The Strategic Project Leadership™ framework for leading projects as strategic competitive weapons is not another myth, or a fading fashion. Rather, it is a revolution, which represents the future of project management. As organizations are facing faster and fiercer competition, they are realizing that project management would be the next front for gaining competitive advantage, and they will gradually move toward a more strategic project management world. Some organizations are already using these concepts with tremendous success; others are learning and adapting to the new era. Implementing the strategic approach is not easy. It requires commitment from the top down, and it involves modified processes, better procedures, new kind of training for project managers, and monitoring. But it could be done. It normally starts as a pilot in one unit, and from there it typically spreads to the rest of the organization. However, there is no way back. Strategic project management is the new competitive front—its potential is big and its advantages are enormous.
This research was supported by a grant from the National Science Foundation, Design and Manufacturing Institute, the Management of Technological Innovation Program, Grant Number DMI-9812730. We greatly appreciate the NSF support.
Brown S. L., & K. M. Eisenhardt. 1998. Competing on the Edge. Boston, MA: Harvard Business School Press.
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Mintzberg, H., Ahlstrand, B., & Lampel, J. 1998. Strategy Safari: A Guided Tour Through the Wilds of Strategic Management. New York: Simon & Schuster.
Reinhardt, A., & Hamm, S. 1999. “Can Steve Jobs Keep His Magic Working?” Business Week, no. 3640, August 2, p. 32.
Senge P. M. 1990. “The Leader's New Work: Building Learning Organizations.” MIT Sloan Management Review, 32, fall.
Shenhar, A. J., D. Dvir, T. Lechler, & M. Poli. 2001, March. “One Size Does Not Fit All Projects: Exploring Classical Contingency Domains.” Management Science, 47 (3).
Shenhar, A. J. 2002. “One Size Does Not Fit All: True for Projects, True for Frameworks.” Seattle, Washington: PMI Research Conference (July).
Shenhar, A. J., D. Dvir. O. Levy, & A. Maltz. 2002. “Project Success—A Multidimensional Strategic Concept. Long Range Planning, forthcoming.
Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA